Independent Chairmen Not So Effective, Researchers Say

Just because a fund has an independent chairman does not mean it will charge lower fees or be more inclined than a management-run fund to comply with the law. Thats the finding of two finance professors at the Columbia College of Business at the University of Missouri, after studying 448 fund families, Newswise reports.

"There is no evidence to show that funds with independent chairs charge lower fees or have a greater level of compliance with existing regulations," said Professor Steve Ferris. In fact, Ferris and his partner Sterling Yan believe some of the fund industrys arguments against this controversial new rule might have merit, notably that independent chairmen, not being intimately familiar with a fund company, could even hurt a funds performance. They also pointed to the possibility that independent chairmen might need a larger staff.